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CA RE Broker's Test

CA Real Estate Broker License

TermDefinition
Abstract of Title Written summary of the chain of title.
Acceleration Clause Any clause in a loan which requires the loan to paid-off upon the happening of a certain event.
Accession* Acquisition of property by its being added to other property.
Accretion Gradual additions to land bordering a river or stream.
Acknowledgment Declaration before a notary by a person (grantor) who has executed a document that he did in fact sign the document.
Acre 43,560 square feet = to 4,840 sq. yds. = to 209 feet by 209 feet, if square.
Actual Authority Authority that a principal actually confers on the agent.
Actual Gain (Profit) For income tax purposes is determined by subtracting the adjusted cost basis from the exchange value of the property.
Actual Notice A person actually knows something (e.g., you know someone has taken possession of the property).
Ad Valorem According to value; property tax is an ad valorem tax.
Adjusted Cost Basis For income tax purposes this is the cost basis, plus improvements, plus existing assessment liens assumed by the buyer, minus depreciation, minus gain(s) deferred from prior transactions.
Adjusted Selling Price For income tax purposes this is the selling price, minus the expenses of the sale.
Adverse Possession Acquiring 5 years off exclusive, notorious & open possession of the property contrary to the best interests of the true owner, under a claim of right or color of title. A quiet title action would be used to perfect title for property taken this way.
Agency An expressed contractual relationship which can be created in writing or orally in which a principal authorizes and empowers the agent to act on behalf of the principal in dealing with third parties.
Agency Disclosure Law Jan 1, 1988 requires agent to disclose agency relationship when it becomes more than casual (applies to: sale of 4 or less residential units or lease longer than 1 year), 3 steps to agency disclosure: disclose, elect, confirm.
Alienate To sell, transfer or convey.
Alienation (Due on Sale) Clause A clause in a loan which requires the borrower to payoff the loan when title is transferred.
All Inclusive Trust Deed aka AITD, Wraparound trust deed, hold harmless trust deed, overriding trust deed It's always a junior lien which is subordinate to, yet includes, the liens to which it is subordinated. Commonly used with land contracts.
Alluvion (Alluvium) The soil deposited by accretion.
Alquist-Priolo Act Discloses the location of earthquake fault lines on a Map.
Amenity Property A home. Amenity properties are appraised by the Market Data Approach.
Americans With Disabilities Act Federal law which requires equal access to public buildings for handicapped persons.
Amortization Can be described as the "liquidation" of a financial obligation, such as a loan.
Amortization Tables Used to determine the monthly payment.
Amortized Installment Note A promissory note which calls for periodic payment of both principal and interest.
Angles A change in direction is often referred to by using an angle expressed by degrees, minutes and seconds.
Annual Net Income In the Capitalization Approach to appraisal is determined by the formula: Gross Income - vacancies - expenses = annual net income.
Annual percentage Rate (APR) The relative cost of credit expressed in percentage terms, disclosed under the Truth in Lending Law (Reg. Z).
Appraisal An opinion of value for a specific property on a given date and is valid for that date only.
Appropriation Governmental permission to a non-riparian owner to take water from a public waterway for private use.
Appurtenance Runs with the land for the benefit of the land; it is real property.
Appurtenant Easement Benefits the land of the dominant tenement. The buyer of the dominant tenement automatically receives the easement.
Arbitration Clause Clause in a contract whereby the parties agree to arbitrate a dispute rather than go to court.
Assessment Lien A lien recorded by local government when a property owner fails to pay for stree improvement within 30 days of receipt of the bill.
Assessment Roll The purpose of the assessment roll is to establish the tax base. Property is assessed every year for property tax purposes at 100% of taxable value (100% of fair market value, 100% of full cash value). Property is reassessed during the year if sold.
Assignment Contracts are assignable unless they call for some personal quality of the promisor, or unless they expressly or implicitly negate the right to assign (e.g., a listing cannot be assigned).
Assumed Assessment Lien Preexisting assessment lien which is assumed (taken over) by a buyer of real property.
Assumption When a buyer "assumes" a loan, the buyer becomes primarily liable, but the seller is held secondarily liable.
Attachment Lien (Writ of Attachment)* Property is held by court order as security for a possible judgement in a pending lawsuit. This lien is valid for 3 years.
Attorney-in-fact Acting for another with a duly executed and recorded power of attorney.
Avulsion* Sudden violent tearing away of land by water.
Backfill Dirt used to fill in excavations.
Ballon Note Partially amortized.
Ballon Payment Any payment which is significantly larger than the other payments.
Banker's Year 30 day month and 360 day year, used for proration and loan calculations.
Beneficiary The lender in a trust deed; the beneficiary holds the pomissory note and trust deed during the life of the loan.
Beneficiary Statement* Statement by lender disclosing the current loan balance.
Bilateral Contract A promise for a promise
Blanket Encumbrance Loan that covers more than 1 parcel of land; commonly used when building new homes.
Blind Advertising* Does not disclose that an agent is representing the seller. When advertising, the licensee MUST disclose that he is an agent. A salesperson's ad MUST name the BROKER.
Board Foot* A unit of measurement of lumber; one foot wide, one foot long, one inch thick; any combination of 144 cubic inches.
Bonds Loan instruments
Boot Cash, other "unlike" property, or "mortgage relief" used to balance the equities of the properties in a 1031 tax deferred exchange.
Borrower's Credit History The risk inherent in the loan.
Broker Person employed for a fee by another to perform a real estate act requiring a license.
BTU ()British Thermal Unit) A measurement of heat used in rating the capacity of heating systems.
Building Resdual Technique Determines the contribution of the building to the value of the enitre property. Use the building residual technique when the unkown factor is the value of the building.
Business and Professions Code Set of California laws regulating business, such as the real estate industry.
Cal-Vet (CA Veterans Farm & Home Purchase Plan)) The state purchases homes and sells them to CA veterans, using a land contract.
Capable Parties Everyone is capable of contracting, except: minors and mentally incompetent persons.
Comprehensive Zoning Laws Provides regulations that are consistent with a single, masterplan of development.
Spot Zoning Laws Provides different zoning requirements for a small portion of a zoning district.
Partial Zoning Laws Apply to a certain portion of the covered area or to certain uses.
Joint Tenancy held by 2 or more people with the right of survivorship, interest is always equal. Unities: Title, time, interest 7 possession (TTIP).
Tenants In Common Held by 2 or more people witn NO right of survivorship, interest can be unequal. Unity: Possession only
Community Property Held in common by a married couple.
Termination of an Easement Easements can be terminated by: express release, legal proceedings, 5 yrs of non-use, merger of the estates, adverse possession, abandonment, destruction of the servient tenement, and excessive use.
Civil Rights Act of 1866 Prohibits all racial discrimination, private or public, in the slae or rental of property.
Federal Reserve Act of 1913 Established the federal reserve system to assist in the operation of federally chartered commericial banks & authorized them to make real estate loans.
Federal Farm Loan Act of 1916 Established the Federal Land Bank Associations, which is authorized to generate capital through the sale of bonds.
Reconstruction Finance Act of 1932 Created the Reconstruction Finance Corporation, designed to provide liquidity for commercial banks.
Federal Home Loan Bank Act of 1932 Created the Federal Home Loan Bank Board & the 12 district banks. This system is critical to current member savings and loan associations.
Home Owners' Loan Act of 1933 Granted member savings and loan associations the authority to lend.
National Housing Act of 1934 Created the Fdearal Housing Administration (FHA) & Federal Savings and Loan Insurance Corporation whichs provides account insurance for member savings and loan associations.
Servicemen's Readjustment Act of 1944 Known as the GI Bill Of Rights was established the Veterans Administration Loan guarantee program.
Appraisal Process Step 1: Define the problem. Step 2: Reconcile/correlate the data. Step 3: Estimate the Value.
Appraisal Reports Letter Form: Less formal; maybe a simple letter summarizing info. Short Form: Checklist used primarily for lenders; most commonly used form. Narrative: most comprehensive & complete analysis.
D.U.S.T. Demand-desire in the marketplace, Utility-ability of the property to satisfy a need or desire. Transferability-the property must be transferable as to use or title to be marketable.
Great Forces Influencing Value (P.E.E.S.) Political/Government Rregulations, Economic Influences, Environmental & Physical Characteristics, Social Ideals & Standards
Principle of Substitution aka Comparison/Substitution Approach & basis of the Market Data approach. Determined by the cost to acquire an equally desirable substitute property, because no prudent person will pay more for a property than others are willing to pay.
Principle of Highest and Best Use The best use of a parcel of land which will most likely produce the greatest net rate of return over a given period of time.
Curable Depreciation Economically and physically possible to correct.
Incurable Depreciation Either too expensive or physically impossible to correct.
Economic/Social Obsolescence Is usually incurable.
Physical Deterioration Caused by events occuring within the property lines such as: wear and tear and deferred maintenance.
Internal(Functional) Obsolescence Caused by events occuring within the property lines and observable during an inspection by an appraiser, such as: poor design of improvements, outdated facilities (old kitchen or heating system) or changes inconstruction styles.
External (Economic/Social) Obsolescence Caused by external events (outside property lines).
Created by: missd2013